Grain Financial Protection Board - Business Plan for Fiscal Years 2016 - 2019

Table of Contents

  1. Executive Summary
  2. Mandate
  3. Governance
  4. Strategic Direction
  5. Overview of Current and Future Programs and Activities
  6. Environmental Scan
  7. Resources Needed to Meet Objectives of Mandate and Strategic Directions
  8. Proposed Capital Expenditures
  9. Information Technology
  10. Implementation Plan
  11. Performance Measures and Targets
  12. Risk Assessment and Management
  13. Communication Plan
  14. Appendix 1: Current Board Appointees

Executive Summary

The Grain Financial Protection Board (Board or GFPB) was established in 1985 and is classified as a Board-Governed Provincial Agency under the Agencies and Appointments Directive (AAD). The Board "administers funds or other assets for beneficiaries named under statute." The Board's mandate, strategies and activities have always been focused on prudent management of the Funds to ensure financial compensation is available to grain corn, soybean, wheat, and canola producers/owners when required. The Board's mandate of administrating the Funds, investigating, granting and refusing claims, and recovering money is directly linked to one of the Ministry's goals of ensuring the sustainability of agriculture in Ontario.

Commitments for 2016-2019

The Board continues to administer the Funds in a sound manner and this provides producers/owners with an effective risk management tool that allows them to remain competitive. The Board has outlined four strategic priorities for 2016-2019:

  • To ensure long-term sustainability of the Funds administered by the Board;
  • To ensure appropriate agreements are reviewed, understood and in place to fulfill its mandate;
  • To continue to investigate and adjudicate claims in a fair and equitable manner; and
  • To grant, refuse and recover claim payments under the Farm Products Payments Act (FPPA).

Revenue and Expenditures and Expectations for 2016-2019

The Board receives revenue for the Funds from two sources. The first is in the form of producer check-off fees that are received when a producer sells one of the four commodities, grain corn, soybean, canola or wheat. Each commodity has its own check-off fee which is expressed in $/tonne. The Minister adjusted check-off fees in 2013 to assist the Funds in meeting the targeted Fund balances. No further adjustments are currently anticipated for 2016-19.

Assuming that the projected sale of the four commodities would be similar to previous years, the projected check-off fees revenue will remain at $375,000 per annum.

The second source of revenue is from investment interest earned on the balance of the Funds held. A decline in financial markets has resulted in the Funds generating lower interest revenue annually. Interest revenue is estimated by reviewing the current investment portfolio and is currently projected to be 1.75% annually.

The Board has been able to effectively manage expenses over the past several years. For 2016-17, both the workload and corresponding expenses are estimated to stay at a similar amount to previous years. For 2016-17, an estimated expense for an actuarial review has been included. It has been a best business practice of the Board to complete an actuarial review every five years and the last review was completed in 2011. Governance/secretariat and finance expenses have also been increased in 2016-17 to reflect the additional workload of completing an actuarial review. The Board has budgeted an increase in expenses of two per cent per annum to capture the projected effect of inflation.

Beginning in 2014/15, the Board included a projected amount for claims. Although four claims were submitted originating from the 2014-15 fiscal year, the claims were not submitted and adjudicated until early 2015-16. For budgeting purposes, an amount of $263,000 annually has been included for each year (estimated claim amount from the 2011 actuarial study).

With the addition of an expense for an actuarial review, the annual net revenue greatly decreases in 2016-17. This generally is a once in five year expense, and the overall soundness of the Funds will be minimally impacted by the actuarial review expense. Also included in the expenses is an amount for claims. Looking at the previous claims history for the Board, it is realistic to assume that the likelihood of having to pay claims each year is low. The Board anticipates it will generate enough revenue to cover all expenses in 2016-17.

The Board will continue to review the soundness of the Funds on an annual basis, and will continue to make recommendations to the Minister regarding the check-off fees as required.

The Board conducted its annual review of the Funds in August 2015 and compared the Funds' performance to the recommendations from the 2011 Actuarial Review. With the adjusted check-off fees in July 2013, the Soybean Fund achieved a growth rate of eight per cent in 2014-15. The Board anticipates the Soybean Fund will continue to grow, and should achieve its targeted balance in the next few years. Total revenue for 2014-15 was $693,178 and total expenses were $205,556.

Key achievements from 2015/2016:

  • Review and management of Fund performance (specifically the soybean Fund)
  • Review and revision of the Expense Allocation Policy
  • Business planning and risk assessment
  • Re-appointment of Board members
  • Annual review of all Board by-laws and policies
  • Adjudication of five claims for four claimants.

The Board worked collaboratively with the Ministry to fill vacant member positions. The Board continues to focus on the effective management of the Funds. All policies and guidelines are reviewed annually to both ensure that the material continues to be relevant, and that the members remain informed. The Board is focused on ensuring that appropriate agreements and directives are up to date and understood by the members so that they continue their commitment of agency transparency and accountability. Legal counsel is available to the Board, and is regularly consulted to interpret agreements.

Mandate

The Board is responsible to the Minister of Agriculture Food and Rural Affairs (Minister) and is constituted under the authority of the FPPA and the regulations made thereunder:

  • O. Reg. 70/12 (Payments From Funds For Grain Producers)
  • O. Reg. 321/11 (Fees Payable to Boards)

The Board's legislative mandate is set out in subsection 4 (1) of the FPPA as:

It is the function of a board and it has power,

  1. To administer its fund;
  2. To investigate all claims made to it under this Act and to determine the extent of their validity;
  3. To grant or refuse the payment of claims or any part thereof and determine the amounts and manner of payment;
  4. To recover any money to which it is entitled under this Act by suit in a court of competent jurisdiction or otherwise.

Governance

The Board members are accountable to the Minister, through the Chair, for setting goals, objectives and the strategic direction for the Board. The Board operates under the authority set out in the FPPA and in accordance with the Memorandum of Understanding (MOU) between the Minister and the Chair. A revised MOU was approved by the Board and Minister in March 2011 for a term of five years. The MOU sets out the operational and reporting relationship between the Board and the Minister, and also outlines the administrative, financial and auditing arrangements with the Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA).

The vision of the Board is to protect the financial interests of Ontario producers who have sold grain corn, soybeans, wheat and canola, as well as owners who stored grain with elevator operators. The Board's vision supports OMAFRA's goal of strong Agriculture, Food and Bio-Product Sectors and Strong Rural Communities; in particular the business risk management components. It also supports the Premier's Agrifood Growth Challenge.

Strategic Direction

The Board has set out four broad priorities which are essential in keeping with the Board's mandate and responsibilities:

  • To ensure long-term sustainability of the Funds administered by the Board;
  • To continue to investigate and adjudicate claims in a fair and equitable manner;
  • To grant, refuse and recover claim payments under the FPPA; and
  • To ensure appropriate agreements are reviewed, understood and in place to fulfill the mandate.

To support the four priorities outlined above, the Board has established five goals with corresponding objectives and activities that are used to assist with fulfilling their mandate.

The five goals which the Board focuses on are:

  1. Long-term sustainability of the Funds - The Board has hired Agricorp for the day-to-day administration functions of the Funds; however, the Board is ultimately responsible for the oversight and management of the Funds. The Board annually measures the performance of the Funds against established targets. The Board will request Actuarial Reviews on the Funds periodically or as required and they will only invest the Funds in instruments that are approved in the MOU. The Board has an established investment policy that is reviewed annually.
  2. Maintaining an adjudication process that is simple, fair and accessible with minimal delays - The Board has approved claim adjudication guidelines and has established operational procedures to assist with the processing of claims. These activities will assist the Board to ensure that the adjudication process is fair and has minimal delays.
  3. Ensuring agreements and directives are understood and documentation required under the MOU is in place - The Board reviews the documentation required under the MOU to ensure that it is both understood and that the appropriate documentation is on file. Legal counsel assists the Board with the review of the agreements.
  4. Ensuring a high performing Board - The Board works with OMAFRA and stakeholder groups to seek recommendations and approvals for appointments to the Board. The Board also maintains an orientation manual and provides new members with training.
  5. Consultation with industry stakeholders - The Board participates in a minimum of one stakeholder meeting per year.

Overview of Current and Future Programs and Activities

How the Program, the Funds and the Board work together

Grain Financial Protection Program

The Grain Financial Protection Program (the Program) was introduced in the mid-1980s, following a series of grain elevator bankruptcies. The following are the components of the Program:

  • Determining the financial responsibility of grain dealers and elevator operators;
  • Inspection of storage sites; and
  • Licensing of grain dealers and elevator operators.

Grain Financial Protection Board Funds (The Funds)

  • The Board administers four Funds: grain corn, soybean, canola and wheat.
  • Income comes from producer check-off fees and the investment income generated from those fees.
  • The purpose of the Funds is to provide producers/owners with financial compensation in the event that a dealer or elevator defaults on their obligation or if there is a storage shortfall.

Grain Financial Protection Board (the Board)

  • The Board will make a decision on a claim based on the evidence and the law.
  • Payment to producers and owners is made after the Board has determined that their claim is valid and the Board has approved the claim for payment.
  • Claims are infrequent and therefore the Board's main activities are to manage the Funds effectively and prepare for claims when they occur.

The Board administers the Funds and, as such, the Board's focus is on the growth of the Funds and on prudent management of expenditures. The Board does not administer a program, and no new programs are being considered for the 2016-2019 time frame.

Goal Objectives Activities
Long-term sustainability of the Funds To maintain actuarially sound Funds that are managed in the interest of producers and owners
  • An Actuarial Review is completed periodically or as required
  • Funds are invested in instruments that are approved in the MOU
  • Review and approve quarterly statements
  • Meet with the Agricorp Chief Financial Officer annually to discuss the Funds' performance, future strategies and other issues
  • The Board's accounts and financial transactions are audited annually by the Office of the Auditor General. A report of the audit made to the Board and to the Minister, as per the FPPA
  • Recover any money to which the Board is entitled under the FPPA by suit in a court of competent jurisdiction or otherwise
To be self-sustaining, paying all legitimate Board expenses from the Funds
  • Review, monitor and approve financial reports
  • Ensure that payments from the Funds are compliant with the FPPA
To ensure the Soybean Fund achieves the proposed minimum targeted balances
  • An annual review of the Soybean Fund to be conducted. Targeted minimal annual growth of 2%
Maintain an adjudication process that is simple, fair, and accessible, with minimal delays To conduct adjudicatory Board meetings and hearings and to issue decisions in a timely and fair manner
  • Have all claims investigated and complete the adjudication process
  • Maintain the claim adjudication guidelines
  • The Board may provide the evidence upon which it based its decision to the parties (i.e. the investigative report including statements by witnesses and supporting documents)
  • The Board may provide an opportunity for all parties to be heard (i.e. an opportunity to make written or, as requested by the Board, verbal submissions to the Board before a decision is made)
Ensure action is taken to recover any money to which to Board is entitled under the FPPA Board compliance with the FPPA
  • When a claim is paid, the Board follows up with the Chief Inspector to determine if security is held and thereafter to ensure that it is deposited to the Funds
  • The Board consults with OMAFRA Legal Services Branch for guidance on how to proceed with any recovery action
Ensure that appropriate agreements and directives are understood and that documentation required under the MOU is in place Board compliance
  • Board members understand the MOU and directives and their roles and responsibilities
  • Necessary documents are prepared and training is planned and undertaken
Ensure a high performing Board To mitigate loss of Board member experience and knowledge as members' terms expire
  • Work with OMAFRA and stakeholder groups to seek recommendations and approvals for appointments to the Board
  • Maintain the GFPB Orientation Manual
Consultation with industry stakeholders To be transparent on decisions of the Board
  • Participate in at least one stakeholder meeting per year

Board Structure

This Board is an example of multiple segments of the agricultural industry joining together to oversee interdependent areas of the industry.

The Board is comprised of a minimum of five members as appointed by the Minister. To ensure stakeholder confidence in its decisions, the Board requests stakeholders to identify candidates for recommendation to the Minister for appointment. Currently membership of the Board includes nominees from the Grain Farmers of Ontario (GFO), the Ontario Agri Business Association (OABA), and the Ontario Canola Growers Association (OCGA). These industry groups select nominees based on the Board's key competency needs of: industry experience as a primary agricultural producer or grain dealer; financial experience in accounting or investments; and board governance and risk management. These key competencies enable the Board to continue to meet its mandate and enhance their performance as a Board. The Minister also has the authority to designate a member of the Board as Chair and another as Vice-Chair. There are currently eight Board members including the Chair and Vice Chair. The Board has submitted a recommendation to the Minister for a new Vice Chair. Appendix 1 includes a list of the Board members.

Environmental Scan

The Board is responsible through its mandate to manage the Funds and to adjudicate claims presented by producers and owners of canola, grain corn, soybeans, or wheat. Producers or owners may submit a claim to the Board to cover a portion of their losses.

The factors that could impact the Board and/or the health of the Funds are outlined below.

External Drivers

Interest Rates

Interest rates play a significant role in the overall health of the Funds. The 2011 Actuarial Review indicated that the Funds are highly dependent upon investment income to cover projected expenses and claims. The review revealed that the current investment holdings are of high quality. The Board will need to continue to ensure that the Funds are invested in high quality investments as outlined in the Trustee Act provisions referenced in the MOU.

Elevator Operators and Dealers

In recent years there has been an increase in the number of smaller businesses offering elevator and or dealer services. Many of these are producers increasing their own on-farm storage capacity and using their surplus storage capacity to store grain for other producers. An increased awareness campaign by stakeholders has resulted in an increased knowledge of the requirement to deal with a licensed facility. Agricorp addresses unlicensed facilities and dealers as soon as they are apparent with sanctions under the Grains Act.

If a dealer or elevator is not licensed, a review of that organization's financial responsibility is not completed. This may increase the risk that the organization will default on a producer or owner. The number of complaints that Agricorp has received about unlicensed operations has increased. In the majority of the cases, the complaint has resulted in the operator completing an application and the issuance of a license for the grain elevator, as a dealer or operator may not purchase or store crop until a license is approved.

Out of Province Dealers

In the past year there has been a few dealers purchasing from Quebec or the US that require a license. Producers are free to sell and transport crop to other jurisdictions but if operations are actively purchasing from Ontario producers a license is required. There are several out of province dealers that are currently licensed.

Increased Demand for Government Accountability and Transparency

Increased scrutiny of both private and public sector organizations has resulted in increasing demands for accountability. Government, including agencies, need to perform their functions effectively and efficiently in a transparent and responsible manner. They must show that government directives are being complied with and outcomes are achieved through clear and regular reporting. The Management Board of Cabinet requires greater Board accountability, transparency, reporting and standardized risk identification and management. In response to the need for greater transparency, the Board completes and submits to the Ministry a quarterly risk assessment report and quarterly financial statements.

Legislative, Strategic and Policy Changes

The Board was established under the FPPA, which is administered by OMAFRA. Any change to the FPPA could have a direct, profound impact upon the Board and its activities. Through the MOU, the Minister and the Chair have agreed to work closely together when the Ontario Government is considering regulatory or legislative changes for the agency. The Chair and the Minister meet as required to discuss any legislative changes that may impact the Board.

Financial Responsibility Review Committee (FRRC)

An important part of grain dealer and operator licensing involves determining the financial responsibility of dealers and elevator operators. The FRRC was established to support the determination of the financial strength of applicants. The FRRC includes an Agricorp staff member and two Chartered Accountants that review files and provide licensing recommendations to the Chief Inspector. The Program helps to ensure that financially viable operations are licensed to purchase from producers.

Commodity Prices

Commodity prices have experienced great volatility that may increase cash flow challenges and increase the amount of risk to the dealer/elevator and, in turn, to the Funds. This volatility has made it harder to predict the future of commodity prices.

Internal Drivers

Funds

The 2011 Actuarial Review revealed that the Funds are highly dependent on investment income. The review recommended that the Board continue to monitor all the Funds against targets recommended by the actuary. It was further recommended that the soybean Fund grow by a minimum amount of two per cent annually. In July 2013, to assist the Fund in meeting its targeted balance, the check-off fee for soybeans was increased from $0.02/tonne to $0.10/tonne. In 2014-15, the soybean Fund's growth rate was eight per cent which met the recommendation in the review. The Board will continue to monitor all of the Funds to ensure they are growing or maintained at an appropriate level.

Board Expertise and Development

The Funds have a low frequency of claims. This makes it difficult for Board members to acquire "hands-on" claims adjudication experience. The Board approved the Claim Adjudication Guidelines which assists Board members without previous claims experience to adjudicate claims. Board members bring a variety of skills and experience and an annual review of these guidelines ensures a consistent approach to adjudicating claims.

The claims that were adjudicated in August 2015 were supported by the claims adjudication guidelines and board member expertise which allowed for an efficient adjudication process.

Board Knowledge Management and Succession Planning

Deliberate planning and consideration is given to the expiry date of members' terms to minimize the loss of experience and knowledge during member transition periods. A continuous review of existing Board members' terms is conducted and staggering of expiring terms is planned.

Resources Needed to Meet Objectives of Mandate and Strategic Directions

Human Resources and Staff Numbers

The Board does not have staff. All resources are provided through a Service Agreement or as agreed to in the MOU between the Board and the Minister.

Resources/Services/Supports Provided to the GFPB:

  1. Contracted Services - Agricorp. Both Governance/Secretariat and Financial Support Services are provided to the Board by Agricorp. These services are provided as agreed to in the Service Agreement between the Board and Agricorp. The Board may enter into a contract for actuarial services in 2016 and an amount for this has been included in the budget below.
  2. Support Services. Through the MOU, OMAFRA is committed to providing the GFPB with:
    1. Investigative services provided by the Agriculture Investigations Unit within OMAFRA's Food Safety & Traceability Programs Branch
    2. Legal services through the Ministry of the Attorney General - OMAFRA Legal Services Branch.

Table 1: Financial Budget - Proposed Operating Expenditures and Projected Revenues

Year Budget (1) 2014/15 Actual 2014/15 Budget 2015/16 Actuals 2015/16
Revenue ($)
Fees 375,000 414,162 375,000 375,000
Interest 242,565 279,016 246,246(2) 246,246(2)
Recoveries       7617.23
Total Revenue 617,565 693,178 621,246 628,863.23
Expense ($)
Claims 263,000(3) 0 263,000(3) 7617.23
Other administration 200 0 200 200
Professional Fees (i.e. Actuarial) 0 0 0 0
Governance/Secretariat Services 45,000 5,954 45,000 22,645(5)
Financial Services 30,000 23,527 30,000 12,674(5)
Costs of Determining Financial Responsibility 156,240 156,240 156,240 117,180(5)
FRRC 25,000 19,835 12,500 6,765(5)
Total Expense 519,440 205,556 506,940 167,081.23(5)
Net Balance (Total Revenue - Expenses) 98,125 487,622 114,306 461,782(5)
Fund Balance Beginning of Year 13,979,340 13,979,340 14,466,962 14,581,268
Fund Balance End of Year 14,077,465 14,466,962 14,581,268 15,043,050(5)

 

Year Budget 2016/17 Budget 2017/18 Budget 2018/19
Revenue ($)
Fees 375,000 375,000 375,000
Interest 248,027(2) 248,480(2) 250,397(2)
Recoveries      
Total Revenue 623,027 623,480 625,397
Expense ($)
Claims 263,000(3) 263,000(3) 263,000(3)
Other administration 200 200 200
Professional Fees (i.e. Actuarial) 60,000(4) 0 0
Governance/Secretariat Services 60,000 47,000 47,000
Financial Services 45,000 33,000 33,000
Costs of Determining Financial Responsibility 156,240 156,240 156,240
FRRC 12,500 12,500 12,500
Total Expense 596,940 511,940 511,940
Net Balance (Total Revenue - Expenses) 26,087 111,540 113,457
Fund Balance Beginning of Year 15,043,050 15,069,137 15,180,677
Fund Balance End of Year 15,069,137 15,180,677 15,294,134

(1) Budgeted numbers from 2015-18 Business Plan

(2) Forecasted Interest rate of 1.75%

(3) Amount for claims are included for budgeting purposes only and are based on the information used in the 2011 actuarial study. The last claims were paid in 2015 and were covered in full by a letter of credit

(4) Actuarial Reviews completed approximately every 5 years. Amount estimated based on cost of 2011 review.

(5) These numbers represent the first three quarters of 2015-16. The Business Plan needs to be submitted by March 1, 2016 and the Board's fiscal year end is March 31, 2016.


  1. Governance/Secretariat and Financial Support Services. The FPPA requires the Board to meet all its expenses from the Funds except for the remuneration of those of its employees who are public servants employed under Part III of the Public Service of Ontario Act, 2006. The Board has entered into a contract with Agricorp, which expires on April 1, 2016, to provide these services.
  2. Board member Per Diems, Travel and Meal Expenditures. A financial review determined that Board remuneration (per diem and incidental costs, including travel) should be paid by OMAFRA and not from the Funds. This change came into effect in November of 2010.
  3. Costs of Determining Financial Responsibility. Since November of 2010, the Board has had the legal authority to pay for the cost of determining financial responsibility of dealer applicants. The Board has signed a letter of understanding that expires on April 1, 2017 with Agricorp regarding the costs of determining financial responsibility.
  4. Professional, Technical or Other Assistance to the Agency. An example of this type of cost would be an Actuarial Review.
  5. Claim Payments. All claim payments and associated costs are paid by the Funds. The total cost depends on the number and complexity of the claims received by the Board and the amount of payments on approved claims. To date, claims have been infrequent.
  6. FRRC. This is the cost of a chartered accountant who reviews all grain dealer files annually to determine if they are financially responsible prior to recommending issuance of a license. The present contract expires in September of 2018.

Projected Board Revenues

The Board manages four separate Funds for grain corn, soybeans, canola and wheat. Revenue is received from producer check-off fees and interest earned on the balance of the Funds held. Producers contribute to the Funds by paying check-offs on crop that is sold.

The Minister adjusted the fees effective July 1, 2013. They are based on the volume of crop sold and are outlined for the four commodities below:

  • Corn: 1/10 of 1 cent/tonne
  • Wheat: 5 cents/tonne
  • Soybeans: 10 cents/tonne
  • Canola: 20 cents/tonne

The Minister has the authority to set these fees under the FPPA. The FPPA authorizes the Board to withdraw amounts from the Funds for specific purposes, such as to compensate producers for valid claims when a dealer has defaulted on a payment or to compensate owners when an elevator has defaulted on a storage responsibility.

The Board is subject to an annual audit by the Office of the Auditor General of Ontario.

Proposed Capital Expenditures

The Board does not have any capital expenditures planned for 2016-2019.

The estimated revenues for the next three years are provided in Table One. The Board has delegated the investment of the Funds to Agricorp, and the Funds are invested in instruments authorized under the MOU. The estimated expenses for the next three years are provided in Table One based on the service agreements with Agricorp.

Information Technology

All Information Technology support is provided by Agricorp through the maintenance of ready access and secure storage of documents developed and received on behalf of the Board. The mandate of the Board does not require Electronic Service Delivery.

Implementation Plan

Performance measures and targets for each objective are identified below. As part of its continuous improvement process, the Board has set goals to ensure that objectives are achieved. The Board also tracks progress against these measures and prepares an annual report.

Performance Measures and Targets

The following indicators define the outcomes the Board is committed to achieving. These indicators are the basis for measuring and evaluating impact.

Objective 1: To maintain a solvent compensation Fund managed in the interest of grain producers.

Performance Measure Baseline Target
14/15
Actual
14/15
Target
15/16
Target
16/17
Target
17/18
Annual financial audit achieves an unqualified audit opinion in accordance with Canadian generally accepted accounting principles Unqualified Unqualified Achieved Unqualified Unqualified Unqualified
Minimum Target Fund Balances are maintained as per Actuarial Review. Note soybean fund is the only one that has an annual growth target due to the fact that it has been below the minimum fund balance the past few years.
Grain Corn target Fund balance Minimum Fund balance $4,600,000 maintained Minimum Fund balance $4,600,000 maintained Achieved-
Balance $5,943,654
Minimum Fund balance $4,600,000 maintained Minimum Fund balance $4,600,000 maintained Minimum Fund balance $4,600,000 maintained
Wheat target Fund balance Minimum Fund balance $2,200,000 maintained Minimum Fund balance $2,200,000 maintained Achieved-
Balance $3,406,045
Minimum Fund balance $2,200,000 maintained Minimum Fund balance $2,200,000 maintained Minimum Fund balance $2,200,000 maintained
Canola target Fund balance Minimum Fund balance $900,000 maintained Minimum Fund balance $900,000 maintained Achieved-
Balance $988,044
Minimum Fund balance $900,000 maintained Minimum Fund balance $900,000 maintained Minimum Fund balance $900,000 maintained
Soybean target Fund balance Minimum Fund balance $4,400,000 maintained Minimum Fund balance $4,400,000 maintained Not Achieved -
Balance $4,124,906
Check-off fees increased and Fund increasing
Minimum Fund balance $4,400,000 maintained Minimum Fund balance $4,400,000 maintained Minimum Fund balance $4,400,000 maintained
Soybean target Fund balance 2% Annual growth in Fund balance 2% Annual growth in Fund balance Achieved - actual annual growth rate of 8% 2% Annual growth in Fund balance 2% Annual growth in Fund balance 2% Annual growth in Fund balance
Receipt and review Fund financial statements from Agricorp Quarterly Quarterly Achieved Quarterly Quarterly Quarterly

Objective 2: To conduct adjudicatory hearings and issue decisions in a fair and timely manner.

Performance Measure Baseline Target
14/15
Actual
14/15
Target
15/16
Target
16/17
Target
17/18
Claims processed with minimal delays Claimants notified within 2 days, dealer and elevators within 4 days of receipt of claim Claimants notified within 2 days, dealer and elevators within 4 days of receipt of claim Achieved - no claims submitted in 2014-15 Claimants notified within 2 days, dealer and elevators within 4 days of receipt of claim Claimants notified within 2 days, dealer and elevators within 4 days of receipt of claim Claimants notified within 2 days, dealer and elevators within 4 days of receipt of claim
Claims are adjudicated fairly Claims are reviewed individually, and follow adjudication guidelines established Claims are reviewed individually, and follow adjudication guidelines established Achieved - no claims submitted in 2014-15 Claims are reviewed individually, and follow adjudication guidelines established Claims are reviewed individually, and follow adjudication guidelines established Claims are reviewed individually, and follow adjudication guidelines established
Claimants received notification of Board decision Within 10 days of a Board decision Within 10 days of a Board decision Achieved - no claims submitted in 2014-15 Within 10 days of a Board decision Within 10 days of a Board decision Within 10 days of a Board decision

Objective 3: To grant or refuse claims and to seek recovery of amounts paid. In accordance with the facts and the legislation as appropriate.

Performance Measure Baseline Target
14/15
Actual
14/15
Target
15/16
Target
16/17
Target
17/18
Claims are reviewed to determine their validity Board refers to FPPA and uses legal counsel as required to determine validity of claims Board refers to FPPA and uses legal counsel as required to determine validity of claims Achieved - no claims received in 2014-15. Board refers to FPPA and uses legal counsel as required to determine validity of claims Board refers to FPPA and uses legal counsel as required to determine validity of claims Board refers to FPPA and uses legal counsel as required to determine validity of claims
Recover any money to which the Board is entitled to under the FFPA Legal counsel is consulted before proceeding with any recovery action Legal counsel is consulted before proceeding with any recovery action N/A Legal counsel is consulted before proceeding with any recovery action Legal counsel is consulted before proceeding with any recovery action Legal counsel is consulted before proceeding with any recovery action

Objective 4: To ensure that the Board is compliant with directives, policies and agreements.

Performance Measure Baseline Target
14/15
Actual
14/15
Target
15/16
Target
16/17
Target
17/18
Updated MOU in place
(expiry March 8, 2016)
Updated as per the Agencies and Appointments Directive section 1.9.1 Not applicable Valid MOU in place. Updated as per the Agencies and Appointments Directive section 1.9.1 Updated as per the Agencies and Appointments Directive section 1.9.1 Updated as per the Agencies and Appointments Directive section 1.9.1
Submit Annual Report Annually July 31, 2015 August 25, 2015 July 31, 2016 July 31, 2017 July 31, 2018
Submit Business Plan Annually March 2014 Achieved March 2015 March 2016 March 2017
Submit Quarterly AAD (AEAD Report for 2014-15) Quarterly Quarterly Achieved Quarterly Quarterly Quarterly
Submit Quarterly Risk Assessment Report Quarterly Quarterly Achieved Quarterly Quarterly Quarterly

Risk Assessment and Management

The AAD requires a risk-based approach to be used to focus Ministry and central agency resources on higher risk agencies and to ensure compliance with directive requirements. The table below provides a description of the risks identified and the plans to mitigate these risks. Aside from the actions detailed below, risk management is also supported by a strong commitment by the Board and its service provider to meet or exceed the performance measures outlined in this plan.

Risk category Risk statement/name Risk level assessment/inherent risk score Risk Action Plan/Mitigation activities
Operational Interest Rate Risk Low- minimal risk exposure The Board ensures that the Actuarial Review remains current to assess the soundness of all the Funds.The 2011 Actuarial Review recommended a target balance for each of the four Funds.
Operational Dealer Consolidation Low- minimal risk exposure The Board ensures that the Actuarial Review remains current to assess the soundness of all the Funds.The 2011 Actuarial Review recommended a target balance for each of the four Funds.
Operational Fluctuation in commodity prices Low- minimal risk exposure The Board ensures that the Actuarial Review remains current to assess the soundness of all the Funds.The 2011 Actuarial Review recommended a target balance for each of the four Funds.
Operational Lack of quorum for Board Low- minimal risk exposure Board member transition is monitored and appointment recommendations are sought and forwarded to the Ministry several months prior to vacancies. This is to reduce the impact to the Boards experienced members leave and new members are appointed.
Operational Lack of adequate skills of members Low- minimal risk exposure Training for Board appointees is on-going and a Board Orientation Manual has been created
Operational Lack of members with experience Low- minimal risk exposure The Board has a Claim Adjudication Guideline to assist members with adjudicating claims. Legal expertise and investigative services are available to the Board (as outlined in the MOU) to support the claims process
Operational Inability to pay claims Low- minimal risk exposure The MOU and the Investment directive outline strategies for investing Funds. The Board is taking action on recommendations of the actuarial review to generate the required revenue to meet the Fund targets
Information Technology & Infrastructure Security Breach of Information Low- minimal risk exposure All Board policies and procedures are maintained electronically. Security breach possibilities are reviewed annually to reduce risks

Communication Plan

Annually, the Board will inform the stakeholders of the status of the Funds by providing them with a copy of the Board's audited financial statements.

Schedule C of the MOU between the Board and the Ministry outlines the communication plan that the Board will follow. The MOU is in effect until March 31, 2016.

Key messages for communication

  • Clearly outlines the process and regulations that are followed in making a decision.
  • Identifies section(s) of the applicable Act(s) and regulations used to arrive at a decision.

Key messages for broad based communications

  • All Funds are maintained on an actuarially sound basis.
  • The Board adjudicates claims made under the FPPA and determines the payment, if any, to be made from the Fund.
  • The FPPA protects the financial interests of producers who sell grain corn, soybeans, wheat and canola to licensed dealers. It also protects the financial interests of owners who store grain corn, soybeans, canola or wheat with licensed elevator operators.
  • Agricorp is responsible under contract with OMAFRA to determine financial responsibility and administer the licensing and inspection components of the Grain Financial Protection Program.

Vehicle used to communicate key messages

  • In the event of a claim, the Board will advise each claimant via letter on the outcome of their claim.
  • The Minister will consult with the Chair, as appropriate, when significant new directions for the Board are contemplated. The Deputy Minister will meet with the Chair, as necessary, to discuss matters of mutual importance to the Board and OMAFRA.

Appendix 1: Current Board Appointees- as of March 1, 2016

Position Member Name Tenure
Chair (Part Time) Campbell, Jim 12-Apr-2005 - 03-Apr-2017
Member (Part-Time) Buttenham, David 22-Mar-2011 - 21-Mar-2017
Member (Part-Time) Senft, Barry 22-Apr-2011 - 21-Apr-2017
Member (Part-Time) Oliphant, Darcy 30-Jul-2011 - 29-Jul-2017
Member (Part-Time) Van Ankum, Henry 25-Apr-2012 - 18-Apr-2018
Member (Part-Time) Brock, Mark 29-Aug-2012 - 22-Aug-2018
Member (Part-Time) Haerle, Markus 29-Jun-2015 - 28-Jun2018
Member (Part-Time) Kobe, Jeff 19-Jul-2007 - 19-Jul-2016

 


For more information:
Toll Free: 1-877-424-1300
E-mail: ag.info.omafra@ontario.ca
Author: Grain Financial Proection Board
Creation Date: 25 April 2016
Last Reviewed: 25 April 2016